In the seven months since the Internal Revenue Service revamped its tribal economic development bond program to boost issuance and help spur job creation, it appears the program has yet again faltered. Since July 2012, when the IRS announced its intent to overhaul the TEB allocation process to reallocate $1.8 billion of available bond volume cap, only nine applications totaling $233.4 million, or roughly 13%, have been awarded by the agency. The IRS could not disclose the actual number of applications approved, but the amount totaled $214.7 million.
Indian Law Partner Randy DelFranco said part of the problem with the TED bond program is that many tribes who would be able to issue TED bonds with good creditworthiness are focused on improving and expanding their casino operations. There hasn’t been a lot of economic diversification with tribes, Mr. DelFranco said. In the few cases where tribes have financed new operations, they have mostly been with taxable bonds.
READ: Tribal Economic Development Bonds: Huge Capacity, Few Users (subscription required)
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